Few people get married thinking they’re going to get divorced. Or about divvying up money or assets after a marriage ends.
But more brides- and grooms-to-be are considering that scenario, especially when it comes to prenuptial agreements.
Prenups are often met with preconceived notions of a lack of trust or a way to protect riches when the partners’ wealth is imbalanced. But divorce lawyers and financial planners argue that prenups are a way to clarify financial matters and open up communication before wedding vows are exchanged.
These agreements are not just for the wealthy and powerful – 62% of divorce attorneys said they saw an increase in clients requesting a prenup, with a significant uptick in millennials signing them, according to a 2019 study by the American Academy of Matrimonial Lawyers.
Here’s a rundown of prenuptial agreements and why you might need one.
The basics
A prenuptial agreement outlines certain property rights and financial assets that each person holds before they marry, and lays out how those assets are to be divided in the event of a split. If a prenuptial agreement is in place, it supersedes the divorce laws of the couple’s state.
“Basically, it’s a divorce settlement that you arrive at before you actually get married,” said David Storobin, an attorney and former New York state senator. “So the advantage of doing it is that you have some goodwill at that point.”
These agreements cover financial matters only: children are off-limits. Though kids can be financially provided for in a prenup, couples cannot change child support or custody.
Rules outlining prenuptial agreements can vary from state to state. Some states require each person to have their own counsel, while other states are less restrictive and parties can enter into a notarized agreement without an attorney.
They can also vary in cost, ranging from about $1,500 to nearing $10,000 in more complicated cases.
Divorce attorneys caution that putting a prenup together should not be a task left to the week of the wedding. Three to six months before the wedding date is a good window in which to complete one because they can take time.
“When couples start planning it a month or two before their wedding date, it winds up being slow because it takes a backseat to the wedding cake and flowers,” Storobin said.
Not just for the rich
While a prenup may be a no-brainer for wealthier people, attorneys said they can also work for couples who may not have accumulated many assets – such as those who want to protect a business they own or just want to outline finances before a marriage.
In general, prenups can be helpful for couples in which there is an existing wealth imbalance – or there might be one later on. Even if people aren’t wealthy now, some clients have reason to believe they will be – for example if they’re in medical school, or expect an inheritance.
Storobin said he’s increasingly seeing middle class clients seeking prenups. Often they don’t want to lose half of what they have or lose a specific asset, like a small business, should they get divorced.
Julia Rodgers, the CEO and founder of HelloPrenup, an online platform for creating prenuptial agreements, said the agreements can be beneficial to both sides, not just the spouse who is wealthier.
“If one party is very, very wealthy, and the other is not, there are mechanisms that you can put in place to make sure that there is some financial equality in the marriage,” Rodgers said.
That’s one reason prenups are becoming more popular among younger people, said Rodgers. The vast majority of users of HelloPrenup are millennials – the average age of site users is 34, she said.
Women especially have an “incredible earning potential” compared to previous generations, Rodgers said.
“The reality is that people, millennials specifically, are entering marriages as a partnership,” she said. “So they don’t have this 1950s style expectation that one person’s going to work and the other is going to stay at home.”
And the ongoing pandemic also has many younger people realizing their savings and assets aren’t as stable as they thought.
Bringing up a difficult subject
While it’s not an easy discussion, Rodgers advised bringing up prenuptials early on – ideally before getting engaged, even if it’s just hypothetical. That way both people are prepared for the discussion when the time comes.
“You walk into the engagement with this expectation and understanding that this is something you’re going to talk further about,” Rodgers said.
It’s not about trust, she said, but rather fears surrounding divorce – especially for younger couples. Only 62% of millennials were raised by both parents, according to Pew Research Center, a lower percentage than previous generations. And it’s important to have open and honest conversations about these fears, both with yourself and your partner.
“Is it because your parents went through a messy divorce?” Rodgers said. “Would this help make you feel really comfortable and give some sense of clarity with finances?”
The most difficult conversations to have in a relationship can be about money, Rodgers said. But it shouldn’t be taboo.
“Just as much as a legal document, it is an emotional document,” Rodgers said. “So a prenup can really help facilitate those conversations about money.”
